Winning Bizness Desk
Mumbai. Gold and silver markets witnessed a sharp crash on January 30 as heavy profit booking hit prices after recent record highs. On the Multi Commodity Exchange (MCX), silver saw a steep fall of Rs 1.10 lakh per kg, while gold became cheaper by Rs 20,000 per 10 grams. Market experts said the correction was triggered by aggressive selling, weak physical demand and a hike in margin requirements by global exchanges, which together put strong pressure on bullion prices.
Silver records sharpest single-day fall
Silver prices on MCX plunged by nearly 27 percent in a single session. The price of one kg silver fell to Rs 2.91 lakh on January 30, compared to Rs 4.01 lakh per kg a day earlier. This marked one of the steepest single-day declines in recent times. Traders said silver faced more intense selling pressure as speculative positions were unwound rapidly after prices touched all-time highs.
Gold also slides sharply on MCX
Gold prices also corrected sharply alongside silver. On MCX, gold fell by around 12 percent, losing Rs 20,000 per 10 grams in a day. The price slipped to Rs 1.49 lakh per 10 grams on January 30, down from Rs 1.69 lakh on January 29. The fall surprised retail investors, many of whom had entered the market at elevated levels expecting further upside.
Two key reasons behind bullion fall
Market participants pointed to multiple factors behind the sudden fall in gold and silver prices. The major reasons include:
- Profit booking after gold and silver touched record highs in recent sessions
- Weakening physical demand following all-time high prices
- Rising concerns over industrial demand, especially for silver
- Increased volatility in global commodity markets
Higher margins add pressure on prices
Sebi-registered commodity expert Anuj Gupta said the Chicago Mercantile Exchange (CME) increased margin money on gold and silver contracts after copper. Gold margins were raised from 6 percent to 8 percent, while silver margins were hiked from 11 percent to 15 percent. Higher margins mean traders have to deposit more money to hold positions, forcing many to sell if they are unable to arrange funds. This leads to heavy selling and pushes prices lower.
Physical market sees limited fall, buyer tips
In the spot bullion market, prices declined but the fall was relatively lower as trading closes at 5 pm. According to the India Bullion and Jewellers Association (IBJA):
- Silver fell by Rs 40,638 to Rs 3,39,350 per kg
- Gold dropped by Rs 9,545 to Rs 1,65,795 per 10 grams (24 carat)
Experts advise buyers to stay cautious. Key tips include:
- Always buy BIS hallmarked certified gold
- Cross-check daily prices from reliable sources
- Remember gold prices vary by carat purity
- Test silver using magnet, ice, smell or cloth methods before buying
